Differences between patriarchs and their brood can occur over anything from strategy to succession. It turns very ugly when centering around ownership and property.

The recent spat over property between retired business tycoon Vijaypat Singhania and son Gautam is also a testimony to this.

Ask Niranjan Hiranandani why different generations in many of India’s established business families are crossing swords, and the real estate developer is quite matter of factly. “Money has taken over relationships. It has become the benchmark for everything.” He adds, as an afterthought, “It’s all about expectations — how much more can one expect to get.”

Hiranandani knows what he is talking about. The Mumbai-based builder is at peace now but a couple of years ago, he had to put out some fires in his own backyard. His daughter, Priya Vandrevala, had moved court against the family over a property dispute. After a few bouts of legal mediation, all’s well at the Hiranandani estate. “I talk to my daughter almost every day... We share a very cordial relationship now,” he says.

The run-in has, however, made him wiser. “Not too many new family businesses are going to last more than two or three generations.” His reason? The new generation (scions or inheritors) does not attach a lot of value to family traditions.

To be sure, internal struggles for power and ownership are the primary triggers for family disputes in India. “As families move out of the larger home, their values get diluted. They stop communicating with each other and only information sharing exists. Even close-knit families disintegrate because of this,” said Mita Dixit, head, research & consultancy, centre for family-managed business at SP Jain Institute of Management Research (SPJIMR).

While instances of familial conflicts between siblings, cousins and other kith and kin are aplenty, father-children rivalries are rare in India. And, even among these, not all were for ownership or control. At Bajaj Auto, for instance, the differences between father and son were about strategy. While chairman Rahul was against discontinuation of the scooters business, managing director Rajiv firmly felt that the future was in motorcycles.

You could even say it was a difference between licence raj and post-1991 mindsets. While the father didn’t really have to ‘sell’ the popular Chetak scooter — it had waiting periods running into years — Rajiv’s focus is almost totally on marketing and selling products to the consumer. Yet, such strategic, generational differences may not prove destructive — they haven’t for Bajaj Auto — and pale in comparison to fights for property, ownership and power.

Consider, for instance, the recent spat over property between retired business tycoon Vijaypat Singhania and son Gautam, who is chairman and managing director of Raymond Group. Also in the fray for their ostensible share are Gautam’s cousins Akshaypat and Anant.

At stake may not be mere flats worth crores in upscale Mumbai but the future of a one-time blue-blooded textiles brand that could do without such distractions while looking to regain its past glory. “The businesses run by such families are huge now. There’s a lot of money at stake.

No family member would want to let go of anything that is due to them without a fight,” says Nisha Khurana, counsel, estate & succession planning, WarmondTrustees & Executors.

Such feuds, however, do little for the durability of a family business. The oft quoted statistic globally is 30:13:3 — 30% of firms survive through the second generation, 13% last the third generation and only 3% survive beyond that.

While this may yet have to be tested empirically in an Indian context, that succession is a challenge for Indian family firms cannot be undermined, states an ISB report titled Family Business 1990-2015: The Emerging Landscape.

The power struggle in some families is so intense that members are not even willing to segregate ownership from management, or reach a consensus on the roles of family members in the business. “If there are multiple stakeholders from the next generation, then the decision on who will be the successor may be a challenge, notwithstanding their capability,” said Kavil Ramachandran, executive director, Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business (ISB).

A few business houses have vertically split their businesses to give clear ownership and accountability to each of the children. In a few others, the children have mutually agreed to do what they are best at. “The division of roles is done in a way where one member manages dayto-day operations, while the other is involved in long-term strategy-making,” Ramachandran explains.

Corporate houses such as the Murugappa Group, Zydus Cadila and Godrej have managed their succession well, family business researchers opined. ‘Business verticalisation,’ or diversification, could reduce disputes around succession in Indian business families. The pie should be large enough for all the members to gain. Another option is to leave the entire management bit to professionals; but that would not go down well with inheritors who fancy they have the smarts to run a business.

NEED FOR MENTORING The filial clash between Ranbaxy founder Bhai Mohan and his son Parvinder is wellchronicled, but forgotten as it hit the headlines in the 90s after a family settlement arrived at by the patriarch for the three sons. The father-son dispute lasted till Parvinder passed away in 1999.

After Parvinder’s death, a dejected Bhai Mohan wanted to make amends, but the distance between the two families by then was beyond a few strides.

Patriarchs like Bhai Mohan failed to communicate their business ideals to their next-gen. They wore so many hats (promoter, key manager, association leader, business chamber member et al) in their working lives that they did not get time to mentor or handhold children. “Proper planning is never done when the patriarch is in control. They do not communicate enough with junior members of the family. This results in conflicts at a later stage when younger members sit in the driving seat,” points out Khurana of Warmond.

Dixit of SPJIMR feels the younger generation is also not adept in communicating with their elders or the family patriarchs. Important business decisions, many a time, are conveyed to an elder via a brief text message. “Now this may not go down well with elders who built the company,” she adds.

LET IT GO Founders and promoters in India are infamous for being unable to let go of their businesses even after retiring from active management. According to Ramachandran of ISB, patriarchs should realise that succession planning is a process and not a one-off event. “The focus should not only be on who will succeed the incumbent but also on the retirement plans of the incumbent herself, for a successful transition to happen.”

RETIREMENT PLAN The term retirement plan is generally used for the salaried class and never for rich successful businessmen. But family business researchers attach a lot of value to retirement planning for patriarchs or heads of business families. Ideally, retirement planning for elders (in business families) should start at the age of 50, they say. Absence of a sound retirement plan worked against Vijaypat Singhania, researchers opine. Quite possibly so, because in a recent interview to Mumbai Mirror, Singhania bemoaned, “Do not transfer all your assets to your children while you’re alive.”

Warmond’s Khurana feels, “The problem is that patriarchs only think about succession, and not retirement. They should have a clear idea as to what they should keep for themselves and what they should pass on.” According to her, elders in business families have now started making ‘private trusts’ to mitigate this problem. A private trust is an arrangement created for the benefit of individuals and it holds asset classes of all types.

Bluntly put, when words belie actions and trust gets broken, a private trust is all that can save an ageing patriarch.